398- The CIO Who Consolidated 14 ERPs Into One w/Craig Gehrke

Foreign. Welcome back to you've been here. We got Craig Gerke on the show NBA ITL you've 2025 Orbi CIO of the year 2024 finalist. Why don't we just start there? We've heard of this for a long time. Everyone's heard of the ORBEE Awards and everything. But what does it really mean to 2000? Why did you win that award? What was it? So Orbee is a award done by Inspire Leadership Network. It's a great network. Primarily it's all driven by other CIOs. It's not vendor driven as much. It's got a lot of any of the election. All the reviews are all done by former ORBI winners. And so it's your peers doing it. So when you can write something up, you can actually make it pretty technical. You can actually put the details in, but then you also have to deliver the value and show how you delivered value and what you did different. And so what did I do? So I was recognized year one just because we had initiated this large project when I stepped into Jacuzzi. So coming in the door, we had a few large projects that said, hey, we need a single data platform, we need a single CRM solution, we need a single ERP. We had 14 ERPs across the business, so definitely didn't need that many. So we put in a roadmap to replace those with a single erp, a single CRM system, and then first was build out a data layer where we could look at the entire business in one pane of glass and say, hey, how are we actually doing without a dozen financial analysts and people on the finance side pulling spreadsheets together and munging things together just to be able to look at the data. Awesome. The data thing is obviously so important nowadays with everyone trying to integrate or talk about integrating or having to have AI implemented yesterday. From the data perspective, what are your steps for cleaning up data? What are the important things that you kind of start with or how do you even start grasping that if everything's all a mess and everywhere. I mean 14 ERP systems, you know, getting your, I'll say master data right is the first step and understanding in the subject matter expert. Everybody wants something different or everybody wants their cut view of it. So the first step is just talking to the business and building the relationship with the business, learning their data. So I'd say that is step number one is really get a grasp of who is the right person to know the data and then who are the decision makers when you Want to do an A versus beast answer? Because you can't always do oh I want both. Because you have to have a master, you have to have a golden. So that's step number one. Finding out who can be your subject matter expert and building. We, we, we called it a steering team but a steering committee Steering team C I think the good people have that like at least are the people that are fortunate enough to have like a somewhat of a project management ability in a mid market, a Fortune 5000 company have some sort of steering committee. Some people have an AI steering committee. So, so we were kind of on the early cusp of AI as well. So we, we had some loose AI steering committee. We never really got it formalized. That was still something that is in work. How are we going to do that best? How are we going to do our AI? Everybody bring their ideas in. We had built. One of the first things I did starting was putting in governance of just internal IT processes, putting all of our change in one location. It was being done on PDFs and so we put in an actual change management system. Well a quick follow on to that was hey, how do we take in all these projects that we do and requests? Because right now they come into Joe's email and Sally's email and requirements weren't being gathered so we put in a full discipline there. Well that also then laid the groundwork for when everybody's like hey, I want to play with this new AI tool or I want to look at this. And they all come in and we built out a quick model of saying any kind of project, you bring something in, it hits this portal, we evaluate the first thing it does. It goes to my security team and say hey, I need you to do an assessment on this tool before I do anything because there's no reason to work on value, any of that if the tool is. It's going to get nixed every time you date it. Exactly. If we're going to look at a meal and go nope, cut it. And then once we did that then we go, okay, what's your value? What's your business requirements? What are you displacing? That was kind of our next step in our project. Request new functionality, request whatever kind of tool discussion you wanted to have there. That's a big challenge with I think everyone, which is an overload of projects. And if you were to actually look at all of the projects combined and then you're actually to put into effect a project management or a full scale project management ITIL like process which obviously you're familiar with across all of that. Most companies would finish all of their projects in like 20 or 30 years. So how do you differentiate who gets what, how do you choose like what's important, what's not important and how do you communicate that in a way that people appreciate? I guess. No, great question. So it's always I read the book Getting to yes long ago and I've always had that philosophy of there's a yes, it may be not your sister yes, it may not be fine no. But there's something in between where we get to a yes solution. And that's what you have to partner with the business on and say, okay, you want these 10 things to happen. This is just business A, you want these 10 things? Well, they want these 20 and they want these 22. Hey, let's look at it all. And so we would literally in the leadership, the executive senior leadership meeting, sit down and at times look through that list and say, look, you want this and you want that. There's some parallels here. If we settle in this area, it meets all your requirements, it meets all your requirements. There's some enhancements or features you were hoping to have, but they weren't requirements. We can look at that later. So it was really about relationship building and getting to a base of we all want to get the right solution and the right requirements met. And then we can look at how do we get the side benefits, additional side benefits through other features, functions. Because at one point we were running 140 projects on a 35 man team. So it was way beyond what should have been realistic. So we called it down and tried to stay focused on what is prioritized by the business and what was delivering the most value. If your Internet goes down and you're calling carriers yourself, that's not strategic. It's we help teams centralize monitoring, proactive tickets and escalation across every location without CapEx. Less noise, more uptime, make it boring again. Just go to you've been heard.com and answer the seven questions to simplify, streamline and save. For years and years and years, IT leadership has worked very, very hard. You've been in the industry for a while. Most people that are in kind of like a CTO or CIO seat now and have entered into the IT world in a way that is. I don't even know if there is a traditional way to enter into IT leadership. I think most people like, oh, I played around with a Commodore 64, I wrote code and like this type of Thing, you know what I mean? And then I went to school for architecture or engineering, and I don't know, I ended up where I'm at today. And I'm sure you have that story, which I'm happy to have you share. But the point is, for decades it has kind of worked to this as the separate department. Right. And may or may not have a seat at the executive roundtable. If they do have a seat at the executive roundtable, that's great, but. And how much nicer would it be to actually be heard also sitting at the executive roundtable? Do you have any thoughts around that? It's imperative that the, whoever the cio, CTO that's leading the organization, as well as whoever that CISO is, whether it's the cio, CTO by proxy or by direct title, they have that seat, they have to be heard, they have to be a part of it. But they can't just be there as a technologist, they have to be there as a business leader. I think that's one of the most imperative things that we found over probably the last decade is that those places, those businesses, those groups that bring that cio, that technology leader to the table, they're winners. They get value and deliver business value out of technology. Now, that's not just giving them the seat that that leader needs to earn that seat and then respect that seat and still deliver on why they own that seat or why they had that seat at the table. So definitely my, my super important that they are always adding value, always bringing, solving business problems that may not even be directly put in front of them and challenging why we're doing things and not just looking at, purely from a technology perspective, just to kind of rephrase it, I'll even say they need to have that seat at the table. But A, they need to earn that seat, and then they need to respect and still own and deliver on having that seat. It's not just about saying, here's the best technology solution. It's about saying, hey, I hear you have a problem. Let's talk about how I can use technology to add value to your business through solving that problem with tech. So I'm sorry, I'm interested because at one point you had to interview for this job role and the executive management must have known that it had a problem. What did you do in that interview to ensure that you would be heard and valued at that executive roundtable before you took the job? Sure. So when I interviewed for the Jacuzzi opportunity, they had an interim cio. I Met her through someone in my network and she's like, hey, listen, I need somebody that can come in, work with me for about six months and basically take it over. Because I'm not a permanent person. I just come in for a time being. So Sheena talked about my background of. I've been in investment banking where I had to build out organizations where there wasn't one. I've. I've gone into retail and turned around teams, built out bigger teams taking projects out of failure state, looked at new technologies, doing AI before AI was this big buzzword that all of the boards and C suite cared about. So having those discussions with her and then having similar conversations with the CEO and at the time, and they just quickly. It was probably the fastest interview process I ever been through. Three interviews over two weeks and an offer I started I don't know, like three weeks later. So it was just kind of a gel culture experience and, and drive for knowing how the business needed to operate. I had built a great reputation at my last company and doing digital transformation, we had done an ERP implementation. We got rid of an old AS400. I was mainframe ERP and moved to Oracle in the cloud. And so they were looking at the same thing. Oracle was one of the solutions they were looking at. They were on as, we're on as 400. And so there's a lot of parallels in my background with that. So I think that kind of led the path. And then when she was ready to move on the. I'd had enough time with the executive team that they didn't take any time to kind of hand me the interim seat and then also that permanent seat. So it was a pretty smooth transition. I built a great rapport with the team. We would just circling kind of close back to the. The Orbee Award when I got that. And I by no means thought that I would win either time and I was very humbled to win that. But it's because I had a phenomenal team. I had great people that saw the vision, had the same goal and they were just incredible getting those projects done because we'd gone through a lot of changes in the organization through all that, those projects starting off. And we really didn't even build out the project teams as much as we were planning in the initial project kickoff and ended up having to do a lot of it with a lot fewer people than we originally proposed. So all this is to say is having a great team is probably your most paramount thing. Step number one, there's a learning here for Other people that may be stuck, they may just not have the forward thinking of an executive team or not. And I don't know, you've probably seen many different scenarios. But if you were to teach someone or give your advice to a new IT leader or anyone that might be stuck not being heard or just still kind of stuck in this cost center mentality type of thing, if you were to create a playbook for creating real business outcomes, right, and being heard, what would your three steps be? It doesn't have to be three, it could be two or five or seven. Sure, that's a great question. Number one is you've got to build a relationship with the business and understand the business. That doesn't mean you need to know the business as well as they do, but you need to understand how they're operating, how they are leveraging technology. What may be some gaps that. Let's walk, let's just walk through that. Because everyone says like you got to communicate in it, you've got to know how to public speak, you've got to have soft skills, you've got to have empathy, right? You got to have all these things like, well, that's. It's easy to say, it's a different thing to actually do it, but it is something that can be learned and there are steps and there are things that you can do that kind of lead to this domino effect of being an effective leader. What does that mean to you? Is it literally just like, hey man, how you doing? What's your family? Talk to me. What's keeping you up at night with people in the business? What is it? How does it start? I know it sounds simple, but I'm being serious. Let's just break this step down. Number one. Well, you nail it for thing there is getting to know people. It's so much harder now to in this highly virtual world, but it's actually easier because you can quickly jump on a call, talk through something. So getting to know somebody, getting to know somebody's business, how do you get to know that? You go sit with them. One of the things that both at Cons or actually even going back to investment banking to consult to Jacuzzi, it's getting on the trade for you to sit on the trade for with traders, see how they're working, see what the challenges are, go to different offices and see how those investment bankers were doing their business. Then when you get to looking at the retail arm, I'd go into stores, watch the store employees. How do they sell something? What are the tools they're using, what are the challenges they use? When do I see a frustration growing on their face to understand what's happening there? And this. Fast forward to Jacuzzi. It was getting into manufacturing facility, seeing how the flow works, doing lots of tours so that you see it multiple times. It's not just one time because one day it may work perfectly, the next day it could be total chaos. So it's really multiple iterations of learning it and seeing it yourself versus just hearing them talk about it, seeing it firsthand is so much more impactful than just hearing from somebody, oh, here's what I do, here's how it works, here's the steps in the process. But having that view and then going and watching it actually happen, you can then say, oh, wait, but this wasn't in what we talked about. How do you do this? And. And then what does that translate to? At a board meeting, it comes back to, hey, these are the. So I hear the problems you're talking about. Here are the things we need to be looking at a more strategic level. We need to look at giving, enabling this kind of a technology or this kind of a process in some cases. I sat on a manufacturing floor not as a technology leader, just as an operations leader. And so being able to stand there and say, here's my background with just operations and ITIL process and how things flow, these are flows, had nothing to do with the technology that I just think you need to be looking at and talking through. And so identifying opportunities to improve the flow of the business. So those kind of steps, those kind of problem solving, those kind of identification, build the relationship, then that translates to a boardroom of saying, listen, I'm partnering with Joe over here, and here's some things that we've identified that we really need to talk through. And obviously, when you get to the boardroom, you're really saying, here's what. We've already had that conversation. We've already built out this proposal. Here's what we're putting forward to the board as a project plan, project status, what we're going to be focused on the next six months of the year, or maybe it's going to go in next year's capital forecast. Are there things that you measure and hold yourself accountable to and report to the board that you think other IT leaders might be afraid to open up and actually report and be transparent with? So I'm a firm believer in transparency. It may be good, it may be bad. I think that's one of the things that's won a Lot of trust with me and executive leadership teams is, I call it the good with the bad and the bad with the good. I. I don't have a problem saying, hey, we're running hot on budget. Here's the reasons it's running hot on budget. Here's what we can try to do to get back on it, or we're seeing a trend of these problems coming in. The one thing that I learned early on from some great leaders is don't try to hide it. You. You hide it, and then when it. It will eventually blow up. And if it doesn't, you're really lucky. But if it blow, it blows up. You don't want to be going back saying, well, I've known about this for a few months. I mean, that just. That just puts scalding water all over your face. And now you've lost the trust the next time, and they're going to want a lot more detail. So. I've always been a big fan of transparency. I've always operated that way. And again, I've had to call it some of my own. I'll call it sins of the past, where I was like, we missed this. We didn't see it coming. And so we've had to fall our sword a few times, but that's how we get better. We're going to not let it happen again. Sins of the past, that's gotta be added to our urban dictionary of IT terms, along with herding cats and all kinds of other things that we have. Okay, so step one was basically like, communicate, get to know, observe. Right. Walk the floor. The issue, though, is that you have an ITIL skillset, so you're actually able to see from a business process standpoint, you have a technology skill set. So both of those add to a leadership skillset. I'd love to know where you got your business or terminology and learning. Like, at what point did you learn EBITDA, gross margin, CapEx, OpEx, all of your accounting terms, which I'm assuming fit in there somewhere, and how important is that? So my cfo, who's a veteran of many years, done a lot of private equity work, paid me an awesome compliment saying I was one of the most financially savvy CIOs he's ever worked with, if not the most financially savvy. And why did he say that about you? So I did an MBA to get the piece of paper to further my career. Little did I know the relationships I would build, the knowledge I would build, just the. I was working for Texas Instruments. At the time. And I had a great leader there who's like, hey, you're doing your mba. Let's get you in a role where you're going to put some of that business acumen, that business knowledge you're picking up to work. So I was working arm in arm with the finance teams. I was doing a lot of our capital purchasing, capital budgeting, operational purchasing and budgeting. And I was there for Texas Instruments as IT organization, which by far at that point that was the largest IT budget I've ever managed. And it was met with the controller of at least once a quarter and went through everything, talked about our. What was the theme there? What was the theme? What came up? What kind of questions did they ask? Where were they? Like, we got to no, that's unacceptable. We got to cut that. No, you can't do that. What was unacceptable and where was there like negotiation? And I'm just curious, like that sounds amazing. Yeah. A lot of the times it was only focused on the run rate of the budgets. They would be very much a partner of saying, hey, I'm. I see we were heavy lease versus capital. In one quarter we would lease a lot, in the next we would capitalize a lot. So he. Why? I kind of know why. Why would we do that? Because they wanted to depreciate something off the. I mean what was it? Sometimes it was a depreciation cycle that where was depreciation rolling off so then we would have more depreciation we could take on. We had a balance. Was that portion a tax strategy or what? Like there's all kinds of reasons why would you depreciate versus lease. So a lot of it was balancing EBITDA you don't want to have in some businesses you don't want to. Some. Some are very capital intensive. You're okay having that high capex, some are. They want lower. So they want. They're willing to take the capital expenditure versus having the EBITDA take a hit because you take more leases on or opex on. So they were just trying to either keep it. It depended on where they knew the rest of the business was going. So they would kind of provide us guidance of like hey, we have a little bit more room in EBITDA this month or this quarter or next quarter. Let's look at shifting some of this that direction. So yeah, just go ahead and get new leases versus hey, capitalizing these hardware. We were a heavy engineering business and we bought or we leased compute by a rack. So we would buy full racks or lease Full racks of compute for our compute farm. And so. And then we would take a strategy at that of. Because I had that visibility across our design, our manufacturing, our IT organization, I could say, oh, hey, this lease is about to roll off. I can now capitalize it. If we have the money over here, I can buy it out and capitalize it over here in this business and. And allow it to. Then to use it. They get it at a great price. It's. It's newer than what they have, but it's. We don't need it anymore. So it was just that partnership of knowing what knobs and levers were constantly needing to be twisted and turned and pulled to make sure that we were being good stewards of their money. That priceless experience there. It was definitely. And so again, what turned into just a chance to kind of grow and learn and take on more knowledge became a huge learning experience that going forward has given me a strong foundation where I could always sit down across the town. And now I'm by no means the CFO or a CIO or anything like that, but I can sit down and have a. A good conversation, especially if we're talking about capitalization of a project. I know the Pricewater has Cooper advice and guidelines inside and out. And so when we would talk, he could rely on when I gave guidance or feedback that I knew what I was talking about and I could give the right approach and it wasn't setting us up for a failure down the road or an audit issue down the road. That was all step one. Exactly. It's the most critical. It's from learning and connecting with the business and all that stuff. And we've pulled a lot out of that. What's step two? Getting your team bought into the strategy. They then also have to have the same philosophy, own that strategy of being here with having that same behaviors. They have to go out and do that as well. I can't do it alone as a leader, because they're going to have that next level of knowledge, that next level of technical details that they can go out and do that same activity or be by my side while we're doing that, so that they can then say, hey, yes, I do know this new technology, technology coming out. We can leverage it, or, hey, listen, we don't have something like that today that will make that happen. So we have to go look at X, Y and Z. So definitely step two is your team has to be brought into that strategy, and they have to then walk that walk. Understand the whole philosophy of getting to yes. And go in lockstep with you on that journey. All right, so get to know the business, then break it out all down, come up with a strategy and then get the team buy in. Those are the first two steps. And then step three is delivery. You've got to deliver to timelines, to requirements, to budget, keeping the business informed along the way, having a good cutover. You've got to have that operational excellence at that point, either operational, project excellence, those cannot then falter along the way because all that upfront work is gone. If you then fail, it's delivering on timelines, making sure that we set up. I mean, it's like, how do we under promise over deliver all that type of stuff? The kind of just like kind of moving on. People are hearing you, people are hearing you. You've got an extensive kind of financial background, you've got an operational background, you've got an mba, plus you got the technical background. It' really honestly like total package. And my question then to you would be, what if they're hearing you? What's the most important thing that you would want executive management outside of IT to really understand? Or what's one thing that you think is really important that every executive should understand about modern it? Every IT person that wants to deliver for the business, wants to be innovative, wants to help them grow forward, is, is truly invested in supporting them. But you get stuck in being comfortable. And at times, I mean, the stereotypes of technologists probably fit in pretty well most of the time of being very locked in, get into, I won't say a rut, but their way of doing things, you got to move their cheese occasionally to get them uncomfortable or it's going to move their cheese and get them uncomfortable and then you can get that next big innovative, that next big step. I think that's the big thing because you have so many stereotypes of IT don't want to move, they don't want to deliver, they don't want to partner, they want to only do what they know and they want. There's definitely always going to be somebody that hits that on the head as a stereotype or a typical behavior. But I think in most cases, most technologists care about delivering. They want to be innovative, they want to learn something new. So being able to learn the business and deliver for them is definitely in their DNA. It's something they want to do. There's no roadblock. It's usually a fear of change or a just not having time to get it done or the bandwidth to get it done. So that's the key message. I always, especially stepping into new organizations, make sure my team is built that way. And I don't have people that only want to do this language, only operate this way. I'm not doing anything different and either helping them grow beyond that or figuring out another solution. But then once you have that team philosophy is making sure the leadership team understands that we don't want to be a roadblock, we want to be an enabler. We just need to figure out how to create more space for that innovation, that getting to yes, that delivering more value for the business. So what's the big disconnect between it and C level leadership? If you had to pinpoint it, usually it's communication style or not sins of the past, but just bad experiences in the past. And then if you've got times where maybe it hasn't gone well in the past or people have bad experiences, what is it? A hundred good deeds disrupted by one bad deed. So you have to be pretty consistent, almost 100% consistent, because bad experiences will outweigh all the good experiences. So that's a huge disconnect. That's just a natural human thing that you have to overcome. And so it's marketing. Your team constantly, is constantly talking to people about, hey, these are all the great things that are happening right now in the biggest success you can have. There is by getting like me getting my peers to be speaking out on behalf of it, saying, hey, they have been awesome. Here are the great things they do for us. And usually I have a good enough relationship that happens organically. I don't have to go ask them to do that. They're just openly saying it to the rest of the leadership team. They're like, listen, hey, we had this great thing. It just went live. We just delivered this great new technology or project it did phenomenal in that right there will build so much credibility, so much momentum, so much success. That is probably the biggest, number one thing that can happen to help overcome the bad or the frustrations or the disconnect, as you kind of pointed it out. But it's marketing and getting people in the market on your behalf. Definitely. I can tell that you read a lot of books. Top three books that made the biggest impact in your life recently or in the past. Doesn't have to be three. Could be one, could be five. What's the first one that comes to mind? Number one that comes to mind is who moved my cheese? I could tell because you said that earlier. Getting to yes is another one maybe getting to yes. Those Are both big ones. Good to great. I love good to great. And execution by Jocko. I think him talking about taking success out of failure and opportunity out of failure is so important that so many people don't understand results. Get results, getting results. Go do it. The prediction, prediction. 18 months from now, what will everyone in it be talking about that people are completely ignoring today? Any ideas, it's going to be around how much they've actually not gotten out of AI because it's still so nebulous. There's going to be a lot of false starts on projects. I mean, there already are a ton of false starts, but in parallel you're going to have just as many people talking about, hey, we didn't expect to get this out of AI and now we do. So I think it's going to be that those two things kind of going side by side, you're going to have some people just like, wow, we weren't expecting to get this out of AI and then you have someone, man, we expected so much more from AI and it just hasn't gotten what we needed. So I think those are the two things. I do hear a little bit of my colleagues us talking about this because we're all feeling the push to get stuff done and gotten some things done and people are starting to, I'd say within the last three months, really get true value from AI and so I think that's in 18 months. One of the things we'll be really talking about. What part of your role fires you up the most as a. In the role that you're at, like, really, what's the most exciting part? It's kind of one thing, but it's two at the same time. It's getting my team excited and fired up and really moving in a direction. Them feeling heard, them feeling motivated, them feeling energized, where they're wanting to innovate and come to the table with ideas. And then the other part of that is kind of the similar thing that feeds into and. And your relationship with the business, they feed in together and you just start building this incredible relationship between the business and technology, where the business wants to be your partner because they realize you want a partner. That when I see that happening and it's just my phone rings because, hey, I want to talk this through with you. Craig, what are your thoughts? It is not 100% technology. It's about business. And we talk through how do we solve that. And then I can feed into, well, what we got some ideas on the technology side that can Help enable and make that happen faster. I love it. So like you said, 18 months from now we're going to be talking about what AI actually did versus what it didn't do. And I think we're going to find that we used it for a bunch of different things. So speaking of execution though, you have a real AI use case though for actually like automating some stuff and everything like. So where have you used it that it's been beneficial from like just a very vanilla, straightforward standpoint? Yeah. I mean you can go back years and we were using RPA and machine learning to do AP automated invoices and processing. So it's just something as simple as, you know, what an a, an invoice looks like. It can look at it, it can code it, it can automatically read it, put it in your ERP and push it through the approval workflow just from that reception. So it eliminates somebody having to look at it, code it, who does it need to be route to? Perfect use case, been done, did it before. It's a real use case that's really fairly easy to do, doesn't need all the big gen AI trained models. You can do it pretty quickly with just some great RPA solutions that have been around for a long time and it's a big win that you can show savings from immediately. Yeah. Cutting paper. It's been an absolute pleasure talk, talking with you. There you go, Craig, you've been heard. Awesome. It's a pleasure, thank. You.